Aussies may pay more for lifesaving hip, knee devices
Exclusive: Health fund members could face exorbitant out of pocket expenses for devices like hip and knee replacements, stents and pacemakers under major reforms being considered by the federal government.
And from 2022 surgeons could also be stopped from selecting the best medical devices to treat their patients, manufacturers of the products claim.
At present health funds have to reimburse the full cost of any medical device on the government's prostheses list but Australians are being massively overcharged.
Private patients pay double the price of those overseas and 45 per cent more than public hospitals.
The changes have been proposed by the Department of Health and private insurers ahead of the May budget which could see an average price set for medical devices.
Health funds would only have to pay the new average price, so if patients or surgeons chose a more expensive device the patient might have to find the extra, out of their own pocket.
An 2019 IPSOS study for the government found half of all private hospital patients already pay a gap fee of around $1000-$2000 for surgeons expenses. Any new medical device gaps would come on top of these.
Health funds are backing the changes which they claim would save health fund members $500 million and stop health fund premiums rising by at least one per cent per annum.
The device proposal would also take the pressure off government subsidies for private health insurance.
However, the Medical Technology Association of Australia (MTAA) said "the choice of medical devices could end up being dictated by private health insurance providers, with no input from healthcare professionals".
The private health system would "mirror the public system which greatly limits choice and focuses on using the cheapest items, this is not what health insurance members sign up for," MTAA CEO Ian Burgess said.
Private Healthcare Australia (PHA) denied patients would face higher gap fees as a result of the change.
"There will be no co-payments, we're absolutely upfront about that," PHA CEO Dr Rachel David said.
However, she said doctors who wanted to use more expensive devices could organise to purchase them for their patients and they would receive the health fund rebate normally paid to the hospital.
In this scenario it would be difficult for funds to stop doctors charging their patients out of pocket expenses.
Medicare legal expert Margaret Faux said doctors could easily build the extra charges to cover for higher device prices into a booking fee or higher consultation charges.
"So yes there is a loophole and there is and nothing the private health insurers can do that will close that loophole," she said.
Australian Medical Association (AMA) president Dr Omar Khorshid said there needs to be reform but rejected the average price model.
Is something unexpected happened during surgery and it turned out a more expensive device was needed, he said: "I don't want to have to be thinking oh dear the patient's going to end up with a $2000 bill or maybe I'd be pressured not to use what's in the patient's best interest because of the cost implication."
A spokesperson for Health Minister Greg Hunt said: "The goal of prostheses reform is to put further downward pressure on private health insurance fees. Our last round of prosthesis reform has helped reduce pressure on private health insurance fees, delivering the lowest change in prices in 18, 19 and 20 years respectively. This is about lower costs for prostheses, not higher. We will consult in good faith as we did last time."
Health funds claim only a few medical devices have been proven to be better than other devices - the vast majority of products are substitutable, as is the case with generic medicines.
A study commissioned by the PHA found Australia's private patients pay 40-110 per cent more for the 68 most used medical devices compared to France, New Zealand and the United Kingdom.
Private patients are also paying 45 per cent more than public hospitals pay for the exact same medical devices and its driving up health fund premiums.
Originally published as Aussies may pay more for lifesaving hip, knee devices